eSys unveils VIA-based PC at Rs 9,990

Delhi-based eSys Distribution Ltd had its worldwide launch of its new range
of PCs in Delhi today, which includes a PC starting at Rs 9,990. There are two
other models available, and priced respectively at Rs 11,990 and Rs 16,990, plus
taxes.

The company also announced the appointment of GS Paul as the CEO of Indian
operations. Paul joins eSys from Tech Pacific where he was the Deputy GM (Sales)
looking after the northern region operations. Simultaneously, eSys has also
announced its expansion plans in India in terms of human assets and
infrastructure.

Branded as ePC and based on VIA C3 800     MHz processor,
the entry-level model is configured at Hynix 64 MB RAM, 20 GB Seagate hard disk,
ASUS CUSI-FX motherboard, Sony 1.44 MB floppy drive, Aztec modem, keyboard,
mouse and headphone. The same configuration with Hynix 128 MB RAM, speakers and
CD-ROM drive is pegged at Rs 2,000 extra. Other things being the same, the 256
MB RAM version comes with a 40 GB HDD and a DVD/CDRW and is priced at Rs 16,990.
All these models comes with a TV output socket, thus one can use a normal
television as a monitor for these PCs. All the models come with a one-year
warranty and a data-recovery CD and all these PCs are multimedia ready.

Interestingly, the PCs are Linux-based and come with an Office suite and a
Linux-based Net browser. Vikas Goel, MD of Singapore-based eSys Distribution Pte
Ltd, said that the Linux OS has been developed in-house by the eSys team and as
such, drivers for the peripherals will not be a problem. The customers will have
the option of going in for peripherals like say a Web-cam, or upgrades according
to his budget.

But how can PCs be this cheap? Goel pointed out that the company is
leveraging on the volume purchase proposition it has with its vendors. "It
is a matter of relationship with manufacturers globally, and a matter of pushing
volumes at the end of the day."

Can the average consumer be persuaded to use Linux, after being used to a
Microsoft environment for so long? "Yes," replied Goel,
"especially in a price-sensitive market like India. It is just a matter of
time and education. Our target customer is the common man, who always wanted to
buy a PC, but could not afford it, like the students." He agreed to the
fact that this product needs to percolate down to the smaller cities where the
majority of its target audience resides. With the e-governance initiatives
gaining momentum, educational institutes, government offices and a few
corporates might become hot prospects.

As far as the channel is concerned, eSys is following a three-pronged
strategy. First, it would like to use an existing consumer electronics
distribution network. Secondly, it will leverage on its already present
conventional channels for pushing boxes and thirdly it is also exploring
slightly unconventional means for selling PCs like telemarketing, Internet sales
etc. For this a B2C portal is also in the offing, Goel revealed, and consumers
can buy online. And of course eSys is focusing on building stronger after-sales
support mechanism. "We are ready to explore every kind of channel to sell
this product." It has tied-up with LG to distribute its ePC through the
conventional consumer electronics goods' channel.

Geol was optimistic that eSys will be able to bring down the prices further
if Pramod Mahajan, Union Minister for IT and Telecom, stands true to his
statement of waiving off the appropriate taxes for a sub-Rs 10,000 PC.

Richard Brown, Director (Marketing), VIA Technologies Inc, was very happy
about this launch. "We have been engrossed in the clock wars of GHz
technologies but no one ever pondered about the real requirements of an average
user. This is a perfect start-up PC for an average user."

Talking about the conventional PC channel, he said that margins have been
set-up higher than the conventional assembling business. eSys has also launched
kits for these PCs in the market. "I am sure an assembler will be able to
make at least four to five percent margin on this product," hoped Goel.

With an aim of positioning this product as a mass-market product, Goel is
talking of a paradigm shift in the PC buying pattern in this country. With no
players in market matching these price points, eSys is resilient about the
market size growth and is aiming to sell at least 10,000 PCs per month in the
JFM 2003 quarter.

Channel Reactions?

Ranjan Chopra, CEO, Team Computers: This is such a welcome move. In fact, we
have been using PCs like these in my office and they are perfectly functional.
They are value for money propositions. It will definitely be a mass market
product. Linux is one of the robust operating systems and one can use it at home
also at ease. In fact, these days there are indigenous softwares office suits
which have low price points and they can be used easily on Linux OS. I feel
smaller assemblers should also sell these PCs. Government per me might do some
buying but major buying will be from the educational institutes and home segment.

Manoj Gupta, Director, Fortune Marketing: We have been associated with eSys
for a long time now and this product will be a success. Especially in a price
sensitive market like India this will be a hot product to be sold. We would also
like to explore possibilities of selling this product if it picks up well
enough.

Gurjeet Singh, Head (Marketing), OA Compserve: Technically VIA is a good
product and such a configuration is surely possible. As a matter of fact various
assemblers have been offering these kinds of configurations but just that they
have not been able to make so much of noise about it. This can be one of the
best offerings in the PC market for the basic education segment. Home segment
will also get a leverage from this PC. It might not be able to pick up any share
in the conventional corporate or government but surely SOHO and home segment
will be big. I am very optimistic about this PC increasing the total market size
in India.

Saket Kapoor, MD, Computer Vision: This kind of product will be nothing but a
fad and it cannot survive. I feel that PC is an integrated product, which
requires personal support, which I doubt if eSys will be able to give. This
surely is a high-risk proposition for any system assembler or integrator. Linux
has not been accepted in the home segment. In fact, very few people would have
been able to work in a Linux operated environment.